Crisis takes down holiday cheer in Russia
Companies cutting down on traditional celebrations
PHOTO: AFP
MOSCOW:
Russia’s economic crisis has taken the glow off the holiday season this year.
Many companies are now forced to scrimp on the once lavish New Year’s parties with simple treats on offer or bringing their own snacks.
Yelena Vetrova, the deputy director of Roll Hall - an entertainment and shopping complex - said that business was mostly good although some clients waited until the last minute to book their parties, while others scaled theirs down.
“For the first time ever this year we were taking reservations in December,” she said, noting that clients used to make bookings as early as May. “Some clients cancelled while other toned down festivities; the average price tag this year is 25-30%, lower than last December,” she added.
But if it was once trendy to show off, the opposite appears to be true amid a shrinking economy, with prices rising and real incomes falling by more than 9% in the first 11 months of 2015. This year, holiday excesses can land businesses in hot water.
Case of Rosnano
The government is looking into what many believe is a suspiciously lavish banquet laid on recently by the state corporation Rosnano, a leader in Russia’s nanotechnology industry. Some 400 people attended the party, which cost more than $30,000 (28,000 euros).
“We have a huge amount of money. Simply a lot,” Rosnano Head Anatoly Chubais told his staff at the event held at a Moscow club, according to a leaked video that caused a scandal.
“We will have a second bonus,” he said, to cries of “hooray!”
“About the New Year’s corporate party,” he wrote on Twitter on Wednesday. “I confirm that all expenses were paid from the personal funds of board members.”
The scandal prompted Deputy Prime Minister Arkady Dvorkovich to order a check into whether the Rosnano employees’ bonuses were justified.
Private sector
For most companies in the private sector, New Year’s habits are hard to break, with three-quarters planning to have a party. But 41% said they have cut their budgets and 21% plan to party in the office, according to a study by the Russian executive search website HeadHunter.ru.
“The situation is not good,” said Yegor Dobrogorsky - head of the event agency Communicator Creative Events, according to which the hard-hit construction and auto sectors appear to be scrimping the most.
“Companies can save by having employees host and participate in entertainment programmes, opting for buffet-style meals or axing the traditional celebrations altogether,” Dobrogorsky added
Meanwhile, Russian Federation of Restaurateurs and Hoteliers President Igor Bukharov said the market for holiday catering was down by a further 20% after last year’s decline.
“The parties have always been an important source of revenue to compensate for a slow January,” he said.
Published in The Express Tribune, December 27th, 2015.
Russia’s economic crisis has taken the glow off the holiday season this year.
Many companies are now forced to scrimp on the once lavish New Year’s parties with simple treats on offer or bringing their own snacks.
Yelena Vetrova, the deputy director of Roll Hall - an entertainment and shopping complex - said that business was mostly good although some clients waited until the last minute to book their parties, while others scaled theirs down.
“For the first time ever this year we were taking reservations in December,” she said, noting that clients used to make bookings as early as May. “Some clients cancelled while other toned down festivities; the average price tag this year is 25-30%, lower than last December,” she added.
But if it was once trendy to show off, the opposite appears to be true amid a shrinking economy, with prices rising and real incomes falling by more than 9% in the first 11 months of 2015. This year, holiday excesses can land businesses in hot water.
Case of Rosnano
The government is looking into what many believe is a suspiciously lavish banquet laid on recently by the state corporation Rosnano, a leader in Russia’s nanotechnology industry. Some 400 people attended the party, which cost more than $30,000 (28,000 euros).
“We have a huge amount of money. Simply a lot,” Rosnano Head Anatoly Chubais told his staff at the event held at a Moscow club, according to a leaked video that caused a scandal.
“We will have a second bonus,” he said, to cries of “hooray!”
“About the New Year’s corporate party,” he wrote on Twitter on Wednesday. “I confirm that all expenses were paid from the personal funds of board members.”
The scandal prompted Deputy Prime Minister Arkady Dvorkovich to order a check into whether the Rosnano employees’ bonuses were justified.
Private sector
For most companies in the private sector, New Year’s habits are hard to break, with three-quarters planning to have a party. But 41% said they have cut their budgets and 21% plan to party in the office, according to a study by the Russian executive search website HeadHunter.ru.
“The situation is not good,” said Yegor Dobrogorsky - head of the event agency Communicator Creative Events, according to which the hard-hit construction and auto sectors appear to be scrimping the most.
“Companies can save by having employees host and participate in entertainment programmes, opting for buffet-style meals or axing the traditional celebrations altogether,” Dobrogorsky added
Meanwhile, Russian Federation of Restaurateurs and Hoteliers President Igor Bukharov said the market for holiday catering was down by a further 20% after last year’s decline.
“The parties have always been an important source of revenue to compensate for a slow January,” he said.
Published in The Express Tribune, December 27th, 2015.